CORPORATE FINANCE
68
As such , we have noted that approximately 60 % of the 28 cities in the prime office market we track have recorded rental declines in the period to Q3 2020 .
AG : The social distancing and movement restrictions brought on by COVID-19 interfered with supply chains and services in the UAE and around the world . With many business activities interrupted in H1 2020 , the office market came under pressure . Businesses reacted to the sudden change in market conditions and vacancies began to increase , leading to occupiers finding newfound leverage to negotiate . Now , landlords are more commonly offering incentives including deferrals , waivers , increased number of cheques and , in some cases , lower headline rents to existing lessees . Extended rent-free periods , increased CapEx contributions towards fit-out , reductions in notice periods and early break penalties are also becoming more common . Sellers and landlords are expected to realign asking prices towards the offer levels of purchasers and occupiers in the near term . Poorer quality assets are likely to experience the largest decrease whereas premium stock will see a more evenly balanced duel between negotiating parties .
However , Dubai ’ s non-oil private sector continued to show improvement
FEBRUARY 2021